June 26, 2011

Is Social Democracy Really Possible?

In my previous post I suggested that one of my frustrations with the radical left is that the alternatives they propose all seem to be unrealistic. Either because they could never work or because it would be impossible to get from the world we currently live in to the world they propose.

A reasonable counter-argument would be that Social Democracy (my favoured alternative) where markets and self-interest are let work where they work but where collective action (via the state, communities and norms) is used to provide the institutional framework that makes markets work, corrects their failures, and redistributes wealth in a welfare optimising way, is itself a pretty utopian project.

In theory it ought to work well, if not perfectly, but in reality it is forever undermined by economic inequality, which leads to political inequality, and to powerful elites able to shape the agenda to an extent. Which leads to insufficient or perverse interventions by the state. Which means we get threadbare social safety nets, and ongoing injustices where the wealthy get to shaft the no so well off. And so social democracies get to stumble along, bearable but never really good enough. Worse still, when dealing with complex challenges – like climate change – they don’t seem to be up to the task.

Of course there are social democracies and there are social democracies, and some Scandanavian countries have done a pretty good job of realising the, still imperfect, ideal. But elsewhere things haven’t run nearly so well. And almost everywhere for at least two decades the social democratic project has been on the retreat.

All of which is a roundabout way of saying I support social democracy, the best system we’ve come up with to-date, but accept it isn’t perfect, and am far from confident that it will succeed in the long run either.